How is tracker less expensive than variable?

W

wexford

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Hi, how is a tracker mortgage cheaper than a variable? Both the ebs tracker and variable are the same...

thanks
 
The EBS tracker is not cheaper than their variable. Tey cost exactly the same - at the moment. It is not a necessary feature of a tracker that it is cheaper than a variable rate. However many trackers are cheaper than standard variable rates on offer and also give the added assurance that the rate will track the underlying ECB rate - something that standard variables do no promise. Check out some of the on tracker rates for more info.
 
Going forward with a tracker you know exacly what the margin is. with the variable rate the mortgate provider decides what the margin will be and there is always the posibility that the provider will grant themselves a larger margin at some future date.

I hope this makes sense to you.
 
thanks guys.

As far as i know, ebs only offer tracker on mortgages of €250k plus...
 
EBS tracker of 3.25% is available irrespective of the loan size or loan to value

a rate of 3.10% tracker applies on loans > 250K where the loan to value is <75%

HTH
 
Those are nominal rates - the respective CARs are 3.30% and 3.20%. You really need to look at the CAR in order to assess the real cost and compare with alternative offers elsewhere. There are cheaper rates than this on offer - see the best buys list linked above.
 

What's the CAR compared to the APR? Can't see this in the FAQ, sorry
 
Oops! Sorry I should have said APR above. APR is to loans what CAR is to deposits. Both are "normalised" rates which allow assessment of the true cost/return of a loan/deposit and comparison across products. The nominal rate does not allow for such like with like comparisons and does not alway reflect the true cost/return on a loan/deposit. Hope that clears things up.
 
I would have thought that APR would be the correct rate to look at in the case of mortgages and loans? CAR is the rate for comparing deposits and investments, non?
 
Ah, okay. Thanks for that. I just read my post again, I wasn't trying to fit as many acronyms as possible into one sentence, honest.
 
But as the 'ole EBS say they have the lowest 'standard variable rate' in the market.
True, but hardly fair given the trackers.
 
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